The Ontario government has introduced legislation to extend the provincial Labour Sponsored Investment Fund ("LSIF") tax credit and increase the maximum investment that qualifies for the LSIF provincial tax credit from $5,000 to $7,500.

Provincial LSIF tax credits will now be offered until the end of the 2011 tax year. The full 15% provincial tax credit will remain unchanged until the end of the 2009 tax year.

The decision means another three RRSP seasons of up to 30% in tax credits for Ontario LSIF investments of up to $5,000 (the 15% Federal tax credit remains unchanged). In addition, Ontario investors will receive an additional 15% credit on investments between $5,000 and $7,500. The move follows consultation with the retail venture capital industry.

"We are pleased that the Government has recognized the importance of retail venture capital to our next generation of entrepreneurs - this is a move in the right direction," said David Ferguson, VenGrowth Managing General Partner. "Ontario's entrepreneurs currently face enormous challenges in getting their companies financed. We need these entrepreneurs to succeed - a healthy venture capital pool helps Canadian companies reach the global stage, creates major employers in our local communities and ensures that our children don't have to leave Canada for careers in sectors like technology or life sciences."

"As a key member of the Retail Venture Funds Association, we have encouraged the Government to find solutions to the funding gap that currently exists," added Mr. Ferguson. "This gap has been holding back Ontario's economy and continued government action is urgently needed to address it."

Since the phase out of provincial LSIF tax credits was announced in 2005, there has been a sharp decline in the amount of venture capital available to start-ups in Ontario. Thus far in 2007 only 23 Ontario companies have raised first time venture capital, putting the province on pace for its lowest number of new financings in over a decade.

The importance of Canada's retail venture capital sector.

- LSIFs have invested over $2.7 billion in more than 600 Ontario companies

- Companies backed by retail venture capital have created over 27,000 high value jobs in Ontario to date

- The payback to the government in terms of tax revenue has been swift and substantial

About VenGrowth

Since 1982, VenGrowth's accomplished private equity managers have invested over $1.3 billion in over 180 companies, building a strong track record of successful portfolio transactions. These investments have been made on behalf of over 180,000 individual investors and leading pension funds, banks, insurance companies and family foundations. Portfolio companies benefit from VenGrowth's substantial experience, resources, and hands-on investment style. VenGrowth's offices are located in Toronto (Corporate Headquarters) and Ottawa. For more information, please visit www.vengrowth.com.